The only new item of information revealed by Director Cordray during his appearance yesterday before the Senate Banking Committee hearing (in response to a question from Senator Elizabeth Warren) was that he feels “quite sure” that at least “some” of the results of the CFPB’s study of consumer arbitration will be publicly released this year. He could not say with certainty “whether it will all be out publicly this year.” The study was mandated by Congress in Section 1028 of the Dodd-Frank Act.
The subject of the hearing was the CFPB’s third Semi-Annual Report to Congress. Much of the hearing was predictable, with Democratic Senators extolling Director Cordray and the CFPB’s accomplishments and Republican Senators challenging the CFPB’s structure, the validity of Director Cordray’s appointment and various CFPB actions.
As expected, Director Cordray received numerous questions from Republican Senators about the CFPB’s data collection efforts which were the subject of a report last week by Carter Dougherty of Bloomberg. Director Cordray rebuffed Senator Crapo’s suggestion that consumers should have the right to opt-out of having data about them provided to the CFPB, stating that the data was “anonymized” and did not contain personally identifiable information. Mr. Cordray defended the CFPB’s efforts as necessary for informing its rulemaking, including its performance of cost-benefit analyses, and fulfilling the CFPB’s reporting responsibilities to Congress. Although Senator Crapo also mentioned the issue of CFPB enforcement attorneys being present at examinations in his opening remarks, he did not ask Director Cordray any questions about the topic. Senator Crapo indicated that he would be sending supplemental questions to Director Cordray and presumably the enforcement attorneys issue will be raised in those questions.
It is unclear whether Director Cordray will also be called before the House Financial Services Committee to testify about the Semi-Annual Report. According to a press release posted on the Committee website, the Republican Committee Chair, Jeb Hensarling, announced that it is his position that the Committee cannot legally accept testimony from Mr. Cordray on the report until he is validly appointed as the CFPB’s director. In a letter to Mr. Cordray, Representative Hensarling wrote “Because you were appointed on the same day and in the exact same manner as [the NLRB appointments held to be unconstitutional in Canning], it is clear, as a number of legal scholars have concluded, that your appointment was also unconstitutional. Absent contrary guidance from the United States Supreme Court, you do not meet the statutory requirements of a validly-serving Director of the CFPB, and cannot be recognized as such.